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CIOs and IT Departments: Profit Centre or Profit Center?

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In business, an operating unit is either making money or it’s detracting from a company’s profits. In simple terms, it’s the difference between a profit center and a cost center.

IT Departments worldwide face the difficult task of demonstrating the ROI that they provide to their parent companies.

IT Departments provide essential support services to other departments within a company, however; these contributions are often not easily quantified into revenue.

Most IT departments traditionally function as cost centers, a business model in which funds are invested but an obvious return on investment is not easily visible.

There’s an increasing need to transform IT Departments into a revenue contributing business. The impact of IT on business is deep, pervasive, and growing.

We literally can’t separate IT and general business. The better any company exploits technology, the better they are at their jobs, knowing customers, working with partners, capturing markets, growing profits.

IT is being called on to transform business, and to do so IT must transform itself, too.

As the developing markets e.g. Nigeria matures, executives becomes wiser and sees the need to focus more on their core business.

And these we have seen with decreasing IT budgets, or outright outsourcing of all IT function. We can broadly say that enterprise in Africa are at a cross-road and are facing typical business challenges – which are changing the way IT function is organized.

Then Role of CIO is also changing – with the change in the IT requirements and model of IT engagements.  IT is getting more and more aligned to business functions – and is seen as a critical enabler for conducting operations.

Traditionally enterprises in the Africa have taken a CAPEX centric approach, – however they now starting to realize the need for and benefits of – OPEX based models.

What this means is that organizations are looking at means to improve ways in which business is conducted.

This may be true for all functions within an organization like Supply Chain, sales and marketing etc.

In the current context of business transformation, including IT departments, CIOs need to innovate in order to stay relevant. Based on survey amongst CIO in the West Africa region, the top priorities for CIOs and IT Managers are getting executive buy-in and support for strategic/innovative IT projects; obtaining budgets for IT investments and managing growing expectations and service needs. I strongly believe CIOs can take advantage of these challenges to re-invent themselves and be seen differently by the business. CIOs need to more from IT productivity to business productivity.

IDC had in different forum highlight the advent of disruptive technology with the 3rd Platform: Cloud, Mobility, Big Data & Analytics and Social technologies had impacted the way IT is consumed. This in itself provides both opportunity and a threat to CIOs and their IT Departments.

An opportunity, if the CIO takes advantage of these to reinvent his IT department by showing value beyond that been seen as a cost center to becoming a profit center.

And the 3rd platform could be a threat if The CIO does nothing other than “keeping lights on” and just maintaining IT systems. Some CIOs can hardly leverage IT to unlock real value and profit, and as a result, most businesses treat IT as a cost center, because that is what it is to them. CIOs need to take advantage of exploits in technology, knowing the business, knowing the business’ customers, working with partners and to growing profits, thereby maintaining their relevance to the organisation.

Already a new class of strategic IT organization is emerging, one that uses the business of the 3rd Platform in cloud, mobile, mixed-sourcing, strategic souring, and e-commerce as core components by delivering business services even better and cheaper than some IT departments.

How Can CIOs transform their IT Departments from a Cost Center to a Profit Center?
The process of transforming a cost center to a profit center is not a simple one, but it’s very achievable.

The first step in transitioning to a profit center is performing a gap analysis. IT leaders should take stock of what they really need to transit, that is, judge what the current position is and decide on the eventual goal of the department.

IT leaders must be certain to ensure that they identify and assess all barriers to transforming the IT department as well as discover what variety of the profit center model is most suitable to the company. Questions that could be asked during the gap analysis are the following:
•    Is there a market or how can I create a market for the IT department to sell identified services to external companies?
•    Do I have resources or partnerships to evolve the transition? 
•    Do O I have a sellable transition business plan to the business?

Take a stock of your IT investments in Licenses or infrastructure, there is a service you probably can compartmentalize and extend to provide and sell to small businesses?

CIOs and IT Managers may also consider a “Charge Back” model to internal sister departments within the corporate depending on the size and structure of the parent company.

A charge back method would strive to frame and describe the means in which an IT department’s sister departments can compensate IT for “extra” or “additional” or “add-on” services delivered e.g. Bring Your Own Device (BYOD) implementation for enterprise mobility.

Creating a charge back method requires participation from all of IT’s internal business partners. Developing a compensation or charge back has the potential to be politically explosive within a corporate, but the benefit to IT is that it can help dispel the notion that it is a cost center by enabling IT to prove that it can generate obvious revenue or at lease save significant cost by regulating technology consumption.

By charging internal business partners for IT services, IT would be able to clearly show the benefits their services provide. For bigger corporation where departments are responsible for their own IT budgets, IT departments need to determine competitive differentiation in delivering its services. Competitive differentiation in this context means that IT should realize that they are not guaranteed to win all contracts put up for bid by internal departments.

IT departments must ensure that they are competitive with their outside competition and must display this competitive advantage by completing projects in an efficient and timely manner.

It is important to know that transforming IT departments from cost center to profit center is a new paradigm that is essential because of the way technology usage is changing. While it may not be popular now does not mean it’s not worth considering.

One phenomenon that we already see putting threat on the job and relevance of CIOs and IT Departments is Business Process Outsourcing (BPO). It’s gradually permeating the IT space as well. Locally, we’ve seen where a whole IT department is outsourced.

You may argue that that is on bigger scale and only big companies can possibly do that. The truth is that when Cloud Computing is at its best, and regulations permit, small and mid-size companies may decide access ERP, CRM services from the cloud on a subscription basis and move from CAPEX to OPEX model as far IT is concerned.

Ten years ago, CIOUpdate.com columnist Sourabh Hajela states that “IT cannot work as a profit center because it fails to meet the requirements for a department to function as a profit center because of the following reasons:
•    Revenues and costs: Accurately quantifying revenues and costs.
•    Market: A focus on customer relationships that are generating higher profits and either discontinue or deemphasize those that aren’t.
•    Product Mix: The creation of a portfolio of products and services driven by market demand.
•    Product pricing: Price products and services to maximize profits.
•    Timing: It is often said that, in business, timing is everything. Profit centers are profitable when they can quickly respond to a market opportunity.”

Mr. Hajela general surmises that IT departments cannot work as profit centers because of its close alignment with other business departments. “An ITO cannot work as a profit center because it has a captive relationship with its “customers,” 

I am sure this suggestion by Mr. Hajela has been over shadowed by the advent of the disruptive technology in the 3rd Platform and the emergence of new models and options for businesses to consume.

In a short while, there will be an increasing pressure to transform IT Departments into a business, a revenue generating entity. CIOs should be prepared to answer the question, what kind of transformation makes the most sense for my business?

I’ll close this article with a quote from Charles Darwin that “It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.”

Bola Adisa
Email: [email protected]
Phone: 07061547518


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FG to Abolish JSS-SSS Separation Policy after 20m Pupils Drop Out

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Federal government has announced plans to end the separation between Junior Secondary School (JSS) and Senior Secondary School (SSS) as part of efforts to improve school retention and reduce the high number of pupils dropping out before completing secondary education.

FG to Abolish JSS-SSS Separation Policy after 20m Pupils Drop Out

Tunji Alausa, minister of Education

Tunji Alausa, minister of Education, announced the proposal on Tuesday during the inauguration of the Ministerial Implementation and Monitoring Committee of the Universal Basic Education Commission (UBEC) in Abuja.

Alausa said the existing “disarticulation policy,” which requires junior and senior secondary schools to operate independently with separate principals, management structures and facilities, has failed to achieve its intended objectives and has instead worsened access to education.

According to him, the Federal Government will present a proposal to abolish the policy at the next meeting of the National Council on Education (NCE), the country’s highest education policymaking body.

“We have 20 million dropouts from primary school to JSS. Where are those students?” the minister queried.

“We also found we have 80,000 public primary schools and only about 15,000 junior secondary schools. That’s a one-to-eight ratio.”

He explained that the mismatch between the number of primary and junior secondary schools has created severe bottlenecks in the education system, leading to overcrowded classrooms at the junior secondary level while many senior secondary school facilities remain underutilised.

Alausa cited Kaduna and several northern states as examples where the policy has contributed to poor transition rates between basic and secondary education.

“This disarticulation policy has failed. We will phase it out. We can’t be creating positions because we want to create director-level appointments for people while we harm our education system. It’s about doing what is best for every Nigerian child,” he said.

The minister said the proposed reform forms part of broader efforts by the Tinubu administration to improve access to education, increase retention rates and enhance learning outcomes across the country.

He acknowledged previous shortcomings in tackling the out-of-school children crisis but expressed confidence that the current administration would reverse the trend.

“This government will not fail. We are fixing it,” Alausa declared.

At the ceremony, the minister also inaugurated the UBEC Ministerial Implementation and Monitoring Committee, chaired by Prof. Rashid Aderinoye, to supervise the execution of UBEC-funded Smart Schools, Bilingual Schools and Alternative Schools nationwide.

He said the committee had been tasked with ensuring that the projects are completed, handed over to state governments and opened for teaching and learning.

Although UBEC has invested in hundreds of Smart Schools and related educational projects across the country, Alausa lamented that many remain abandoned, unfinished or yet to admit pupils, describing the situation as an unacceptable waste of public resources.

He stressed that improving education requires more than constructing schools, insisting that completed facilities must become fully operational and accessible to learners.

 

 


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FG Mulls National Skills Database to Tackle Unemployment

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Federal government has said that it plans to establish a National Skills Database as part of efforts to reduce unemployment, address the growing mismatch between available skills and industry needs, and strengthen workforce planning through data-driven policies.

FG Mulls National Skills Database to Tackle Unemployment

The proposed database, to be developed under a Nigerian Skills Observatory, is expected to provide real-time information on the supply and demand of skills across sectors, enabling better job matching, improved policy formulation and targeted investments.

The plan was unveiled at the second National Skills and Industry Alignment Roundtable Series held in Abuja with the theme, “The Role of Data in Job Creation, Coordination and Linkages.”

Delivering the keynote address, Yemi Kale, group chief economist and managing director of Research and Trade Intelligence, Afreximbank, said Nigeria’s labour market challenge was no longer the absence of data but the inability to convert existing information into actionable intelligence.

“The challenge for us as a nation is not one of data accumulation. It is one of data integration and intelligence,” Kale said.

He explained that although vast amounts of information on education, employment, wages and skills development already exist across government agencies, educational institutions and the private sector, the data remains fragmented, making effective labour market planning difficult.

“Data tells you what exists. Intelligence tells you what is happening, what is likely to happen next and what actions should be taken,” he said.

Kale lamented that while Nigeria produces thousands of graduates annually, employers in critical sectors continue to struggle to recruit qualified workers, even as millions of Nigerians remain unemployed or underemployed.

“The problem is that employers are searching, workers are searching, policymakers are searching and investors are searching independently rather than collectively. Opportunities that should be visible remain hidden because the information needed to connect them is fragmented,” he said.

According to him, the disconnect has created structural inefficiencies that discourage investment, suppress productivity and prevent Nigeria from fully leveraging its youthful population.

He added that countries that successfully transformed their economies deliberately aligned education, skills development and workforce planning with the needs of industry.

Kale urged Nigeria to view its youthful population as an economic asset by ensuring young people acquire skills demanded by modern industries.

Speaking on the proposed National Skills Database, Rimam Nuhu, special assistant to the President on Workforce Development,  said the platform would serve as the foundation of the Nigerian Skills Observatory.

“At the most foundational level, the Skills Observatory is to create a database on the demand and supply of skills,” Nuhu said.

He explained that the National Council on Skills, chaired by Vice President Kashim Shettima, would rely on data generated by the observatory to formulate evidence-based policies on workforce development.

“Skills development is an input for job creation. We have a market where there are a lot of skills mismatches. Understanding exactly where those shortages exist will help us plan better and improve workforce planning.

“Ultimately, that contributes to a more productive economy,” he added.

Nuhu acknowledged ongoing debates over whether Nigeria is facing an actual shortage of skilled workers or merely a mismatch between available skills and labour market demand, stressing that the database would provide the evidence needed to guide interventions.

Earlier, Akubo Adegbe, senior special assistant to the President on Coordination and Delivery, said the roundtable was convened to tackle the fragmentation of labour market information across government institutions and the private sector.

He noted that despite huge volumes of workforce data being generated daily, the lack of coordination often leaves policymakers without a comprehensive understanding of labour market realities.

“If our first Roundtable challenged us to better align skills with industry, this second Roundtable challenges us to better align information with action,” Adegbe said.

Also speaking, Massimo De Luca, head of Cooperation at the European Union Delegation to Nigeria and ECOWAS,  said the EU would continue supporting Nigeria’s efforts to build a labour market capable of meeting investors’ needs.

“We have a shortage of skilled labour when it comes to big investment projects. On the other hand, we have a lot of untapped talent that is not adequately recognised.

“Those are realities that investors take into account,” De Luca said.

He commended the Office of the Vice President for leading reforms aimed at strengthening Nigeria’s skills development ecosystem.

The Federal Government’s plan comes amid persistent unemployment and skills mismatch in Nigeria, where many graduates remain jobless despite employers reporting shortages of qualified workers in critical sectors.

The National Skills Database will serve as the foundation of the proposed Nigerian Skills Observatory, an initiative designed to provide real-time labour market data to guide workforce planning, skills development and evidence-based job creation policies.


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First Lady inaugurates IT academy, clinic, launches food bank programme in Jigawa

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Nigeria’s First Lady, Senator Oluremi Tinubu, on Monday commissioned the President Bola Ahmed Tinubu Academy, alongside a modern clinic and dialysis centre named in her honour, describing the projects as “clear evidence of the government’s commitment to improving infrastructure, expanding access to quality healthcare, and investing in the future of the young.”

First Lady inaugurates IT academy, clinic, launches food bank programme in Jigawa

The First Lady of the Federal Republic of Nigeria, Senator Oluremi Tinubu, cuts the ceremonial ribbon to officially commission the Senator Oluremi Tinubu Clinic and Dialysis Centre in Hadejia Local Government Area of Jigawa State. She was joined by the Governor of Jigawa State, Malam Umar A. Namadi, and the Director General of the National Information Technology Development Agency (NITDA), during the commissioning ceremony.

The commissioning took place in Hadejia, Jigawa State, where Senator Tinubu emphasised that the state-of-the-art clinic would bring “relief and hope to many patients and their families in Hadejia, neighbouring communities, and beyond.”

She added that the academy represents President Tinubu’s dedication to human capital development and educational excellence, which secures “a better tomorrow” for Nigeria’s children.

In addition to the health and education projects, Senator Tinubu also launched the National Food Bank Programme, a deliberate and sustainable response to food insecurity and malnutrition among vulnerable households.

The initiative is designed to ensure that children under six, pregnant women, and lactating mothers have access to nutritious food, directly advancing President Tinubu’s Renewed Hope Agenda on food security and improved health outcomes.

The programme is being implemented through a strategic partnership between the Office of the First Lady, the Federal Ministry of Health and Social Welfare, the National Primary Health Care Development Agency, and the Bank of Agriculture.

According to Senator Tinubu, the initiative will “build a stronger and more prosperous Nigeria” by safeguarding the health and future of its most vulnerable citizens.

The clinic and dialysis centre were built and fully equipped by FutureMap Foundation and eHealth Africa, in honour of the First Lady’s passion for uplifting underserved communities and vulnerable people.

The President Bola Ahmed Tinubu Academy was established with the support of His Excellency President Bola Ahmed Tinubu GCFR and the National Information Technology Development Agency (NITDA), underscoring the administration’s commitment to innovation and education.

Both projects are designed to work hand in hand. The academy, with its fabrication laboratory and advanced learning facilities, will support the clinic by developing prototypes of body organs — especially kidneys — to aid research, early detection, and prevention of chronic kidney disease.

This synergy ensures that education directly fuels healthcare innovation, creating practical solutions to pressing medical challenges.

The First Lady, who expressed deep appreciation to the NITDA Director-General for the honour, re-emphasised the benefits of the academy and the clinic saying: “We are grateful for these honours done to us. Thank you.

“These projects are clear evidence of the state and federal government’s commitment to improving infrastructure, expanding access to quality healthcare, and investing in education and the future of young people.”

The First Lady further highlighted that the Bola Ahmed Tinubu Academy represents the President’s commitment to human capital development and educational excellence. She added, “By investing in the education of our children today, we are securing a better tomorrow for them.”

While speaking on the National Food Bank Programme, the First Lady described it as “a deliberate and sustainable response to food insecurity and malnutrition among vulnerable households in Nigeria.”

She stressed that the initiative is designed to ensure that children under the age of six, pregnant women, and lactating mothers have access to nutritious food, adding that “this programme aligns with the Renewed Hope Agenda of His Excellency President Bola Ahmed Tinubu, advancing food security, improving healthcare outcomes, and building a stronger and more prosperous Nigeria.”

She explained that the programme is being implemented through a strategic partnership between the Office of the First Lady, the Federal Ministry of Health and Social Welfare, the National Primary Health Care Development Agency, and the Bank of Agriculture.

Recalling its rollout, she noted that, “We have launched the National Community Food Trust Fund and inaugurated the Board of Trustees in Abuja on 2 April 2026. On 27 April, we conducted the first launch in Borno State for the North-East Zone, and today, by the grace of God, we are launching the second National Community Food Bank here in Jigawa State for the North-West Zone.”

Commending the swift implementation in Borno, she observed that the programme has already enrolled 560 beneficiaries and reached 468 vulnerable children, pregnant women, and lactating mothers in less than two months. “This impressive achievement gives me confidence that Jigawa State will set even higher standards for others to follow,” she declared.

The First Lady emphasised that Jigawa’s agrarian potential makes it a strategic choice for the North-West launch and called for “sustained collaboration to build a transparent, accountable, and efficient food bank system that reaches vulnerable households across Nigeria.”

Earlier in his remarks, the Jigawa State Governor, Mallam Umar A. Namadi, expressed deep appreciation to Senator Oluremi Tinubu and all distinguished guests, noting that their presence in the state for the North-West launch of the National Community Food Bank Programme was “a strong demonstration of solidarity with families who need support and a reaffirmation of our shared duty to protect the vulnerable segment of our population.”

He emphasised that the event served as a reminder of the duty at the heart of public service — ensuring that every child’s health, survival, and development are safeguarded.

Governor Namadi described the initiative as “a timely intervention that will not only bring food resources closer to the people who need them most but will also contribute to better nutrition indices among our children.”

He acknowledged the vision and compassion of the First Lady, stressing that the food bank programme addresses both immediate needs and the long-term well-being of children.

He added that the programme provides a platform for nutrition and support to vulnerable households through partnerships with community leaders, farmers, civil society organisations, and the private sector.

Linking the initiative to constitutional responsibility, the Governor cited Section 16, Subsection 2 of Nigeria’s Constitution, which mandates the government to provide “suitable and adequate food for all citizens.”

He commended President Bola Ahmed Tinubu for fulfilling this responsibility through national food security and food bank programmes.

He further explained that Jigawa State had already established strong policy foundations through its State Food and Nutrition Policy and State Social Protection Policy, which support targeted nutrition assistance for mothers and children.

According to him, the food bank initiative “strongly complements our existing commitments, serving as an effective mechanism for delivering direct benefits to vulnerable families.”

Highlighting progress already made, Governor Namadi pointed to Jigawa’s homegrown nutrition programme implemented across 300 communities, which screened over 240,000 children in 2024 and 382,000 in 2025.

He noted that the programme successfully transformed thousands of children from moderate acute malnutrition to healthy status, while 600 women were trained to produce locally made nutritious formulas such as Tom Brown.

He assured that North-West governors would give the food bank programme the support it deserves, pledging to provide storage and distribution facilities, strengthen food centres, and ensure transparency and accountability in reaching vulnerable households. “A nutritious meal for a pregnant woman can safeguard two lives, and nutritious food for a child can support learning and growth,” he said, calling for diligence and compassion from all stakeholders to ensure lasting impact.

The newly commissioned projects in Hadejia, especially the President Bola Ahmed Academy and the Senator Oluremi Tinubu Clinic represent a deliberate effort to integrate advanced technological innovation with critical healthcare delivery. The Academy is structured as a sustainability-oriented institution, designed to transform technical knowledge into practical community solutions.

Its infrastructure includes a fabrication laboratory and maker space for prototyping health wearables and prosthetics, an innovation lab with AI-driven tutoring, and a pitch space for start-ups and research ideas. Complementary spaces such as the atrium, auditorium, and residential hostel ensure that the academy functions not only as a training ground but also as a hub for collaboration, digital upskilling, and community engagement.

The clinic serves as the healthcare counterpart to the academy’s innovation ecosystem. It houses a dedicated dialysis centre to address the region’s burden of chronic kidney disease, alongside a fully equipped operating theatre and maternity rooms for safe maternal care. Every ward is integrated with continuous piped oxygen, ensuring readiness for respiratory emergencies, while the facility’s reliance on renewable energy systems guarantees uninterrupted power for critical medical equipment.

This design reflects a strong emphasis on resilience, sustainability, and accessibility, bringing life-saving services closer to underserved communities.

Together, the academy and clinic form a symbiotic model in which education and healthcare reinforce each other. The academy’s fabrication laboratory is expected to provide diagnostic tools and organ prototypes, while the clinic applies these innovations in real-world patient care.

This collaboration offers a pathway for early detection and prevention of chronic illnesses, particularly kidney disease, while also strengthening Nigeria’s broader health technology ecosystem.

The integration of infrastructure, innovation, and medical service delivery positions Hadejia as a potential model for how technology and healthcare can be combined to address pressing community needs.

It may be recalled that last week, the President launched the establishment of the National Health Technology and Data Analytics Office, a move expected to strengthen Nigeria’s capacity for medical research, data-driven healthcare delivery, and the integration of technology into public health systems.

The event was attended by all seven governors from the North-West geopolitical zone and their spouses; the Minister of State for the Federal Capital Territory (FCT), Hajiya Mariya Mahmoud Bunkure; the Minister of State for Education, Professor Suwaiba Sa’id Ahmad; and the Director-General of the National Primary Health Care Development Agency (NPHCDA), Dr Muyi Aina, who represented the Coordinating Minister of Health and Social Welfare, Professor Muhammad Ali Pate.

Also present were the NITDA Director-General Kashifu as well as other government functionaries and traditional rulers.


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